“Have the courage to start with the customer.”

In his farewell letter to Groupon employees, recently fired CEO Andrew Mason imparted these words of wisdom to his former employees. “My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers,” he added.

Mason’s parting remarks serve as a reminder that any business’ fundamental understanding of its customers and what motivates them is of paramount importance to its ultimate success. If Groupon truly understood its customers, it would have created data to track their likelihood of referring Groupon to others, which is an essential part of the company’s business model (“Group”-on … get it?).

Instead of taking the time to gain that understanding, Groupon made the assumption that they were targeting discount-hungry consumers who couldn’t resist a good deal. But, in order for Groupon to exist in the first place, it needed merchants who could actually provide the products and services to the consumer. So, the company convinced those merchants that allowing consumers to pay less than retail price for a one-time deal would magically produce loyal, long-term customers that would fill empty seats, drive traffic during previously off-peak periods, and increase revenues over time – essentially spinning a yarn that there were hoards of customers who would love you forever if you just gave them that first great experience at 50% off.

So those assumptions that Groupon made about its customers? Well, you know the saying about making assumptions. Except in this case, not only does Groupon look foolish, but so do the countless number of merchants who signed up with ambitions of exponential growth from their participation. Were there success stories? Absolutely. Were they the norm? No, they weren’t.

Groupon’s shortcomings and short-sightedness illustrate the importance of both business and marketing strategy being rooted in customer development and validation. A key component of customer development and validation is going outside of the building and talking to customers, partners, and others in order to learn more about what they want from you and what they truly need to make their experience remarkable, valuable, and enjoyable. From there, you can develop solutions-oriented functional strategies that keep the customer at the forefront.

At DEG, every successful project prioritizes the customer (“end-user”) experience. We design from the end-user’s perspective in order to foster customer-centric digital experiences. We collaborate with our clients to understand the demographics, psychographics, emotional/practical needs, and the expectations of the users for which any given project is intended. But we always look at these with the brand’s overriding business objectives in mind. By doing so, we can not only develop features and content that meet the user’s needs, but that also empower the brand to achieve. Taking this approach to design and development can be rocky, certainly, as there are occasions where what a user might want and what a brand wants to deploy might conflict. But by keeping the customer at the forefront, understanding why they behave the way they do, and then taking a smart, practical path to conversion we can find the right balance and give everyone what they need from the experience.

By starting with the customer in mind, conversations on the Web become relevant and important, and information and functionality can be delivered in a way that meets the customers’ needs and expectations. Employing this “customer first” business model and extending it to the Web can help businesses gain a deeper connection with its customers, and makes data collection and and analysis all the more important because it can drive the creation of a more personal experience.

The alternative is to do what Groupon did, which was to keep trying to hammer home its near-sighted, insular strategy until it alienated its user base and ultimately lost what made it a great story and a powerful tool in the first place. Groupon worked well for the consumer and for Groupon itself, but it was bad for its client brands. The result is that Groupon’s new leadership is going to have to fight twice as hard to recover that special place in the minds of users and business partners alike. As it takes on that fight, it needs to remember that the experience it provides has to work for everyone – lasting value for the consumer and a sustainable avenue of growth for the brand. When it does, it’s the best deal out there.

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